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Charities Not ‘Charging’ Corporates for ‘Enough’!

Most charities are not asking their for-profit partners for enough money to cover marketing and sponsorship arrangements, according to a new study by Chicago-based IEG, a firm which studies the sponsorship industry.

Charities Not ‘Charging’ Corporates for ‘Enough’!Tuesday, 28th September 2004 at 1:09 pm

Most charities are not asking their for-profit partners for enough money to cover marketing and sponsorship arrangements, according to a new study by Chicago-based IEG, a firm which studies the sponsorship industry.

The IEG SR Strategic Philanthropy Study surveyed 145 Not for Profit managers about their marketing and sponsorship deals.

The study found that although nine out of 10 respondents said they offer marketing benefits in their grant proposals and 76 percent offer their donors rights to promote their partnership, only 23 percent of respondents request a servicing fee.

The reason? Seventy-two percent of those surveyed said they were unsure of what to charge. In addition, 45 percent were uncertain about what benefits companies wanted, while 44 percent cited a lack of understanding among charity employees about the benefits of partnering with for-profit organisations.

The president of IEG, Lesa Ukman recommends that charities add 15 to 25 percent to the fee they already charge companies in marketing promotions to offset the costs.

Ukman says the recommended fee may seem high to some NFP’s that fear alienating their donors; however, the return on the donor’s “investment” increases with their philanthropic partnerships.

It is a give and take relationship, the report says, as many corporations benefit from their marketing relationships with Not for Profits.

Released in July, the report found that more than half of the 145 respondents said their donors requested marketing benefits. In contrast, only nine percent reported that none of their corporate donors expressed an interest. The most requested benefit—the donor’s right to promote their partnership in their own marketing initiatives (67 percent).

Also high on the list of requests were:
– credit on collateral materials (66 percent),
– category exclusivity (61 percent),
– right to conduct a cause-related marketing campaign (41 percent),
– title of a program (40 percent),
– tickets and hospitality (30 percent), and
– information related to a property’s database, ID in guaranteed media and pass-through rights for customers, vendors and other business partners (19 percent).

The study says that all of these benefits come at a price to some Not for Profits which accrue administrative costs during joint marketing promotions.

The increasing number of informed consumers has affected the role of businesses in the global economy. The report also stated that a corporation’s community involvement, including philanthropy and cause-related marketing, may affect a consumer’s decision to:
– buy a certain product or use services,
– a government’s decision to grant a license to operate,
– a financial analyst’s decision to recommend investment in the company,
– an individual’s decision to seek employment with the firm.